The Cheapest Tool in the Box

Stanley Black & Decker disappointed investors last fall both with a weak forecast and a dodgy explanation. It's a good chance to buy an iconic stock.

It was as quick and painful as a hammer coming down on a thumb. After meeting third-quarter profit expectations, Stanley Black & Decker told investors last October that it would come up well short of full-year earnings expectations. Shares of the world's biggest toolmaker immediately turned crimson, losing 17% of their value over the next two days.

Much of the weaker forecast stemmed from a recent acquisition, Niscayah, a Swedish commercial-security unit that was hemorrhaging customers. Stanley Black & Decker...